Buy at the ASK, Sell at the BID

The ASK is the price that the stock is being offered for. The BID is the price one is willing to buy the stock for.

Imagine you’re buying mangoes in the market. The vendor is selling them for Php60/kg. (ASK). You bargain with her to give it to you for just Php50/kg. (BID).

Same thing with buying or selling stocks. As I have mentioned in my previous post ‘How to Buy Stocks’, the rule is: ‘Buy at the ASK, Sell at the BID’. If you are buying, you look at the ASK. If you’re selling, you look at the BID.

And for easier recall, use the acronym B.A.S.B. which you may give whatever meaning to, whichever works for you. Here are some suggestions:

Today, I will explain what the columns for Bid and Ask mean. As usual, we’ll do this by looking at the image first before reading the description that follows.

Buy at the ASK

First make sure that the market is open (M-F, 9:30-11:30am, 1:30-3:30pm). In this case, it’s only a few minutes before it opens so it says ‘Pre-Open’ under Market.

We’re buying Ayala Land Inc. as an example. Once you type the Stock Code on the 1st box (in this case, ALI), all the info about it will appear on the right side.

On the ASK board, you’d find the top 5 lowest ASK prices: 27.20, 27.30, 27.40, 27.50 and 27.60. Beside them, you will find the total number of shares being offered, as well as the number of people offering them.

The 1st row shows: 27.20 – 5,500 – 4

So, for ALI, the lowest ASK price that you can buy it for is 27.20. There are a total of 5,500 shares being offered at this price. And there are 4 traders offering them.

Same thing for the 2nd row: 27.30 – 900 – 2

The 2nd lowest ASK price for ALI is 27.30. There are 900 shares being offered at this price. There are 2 traders offering them.

And so on and so forth.

Thus, if you want an immediate execution of your order, refer right away at the price in the 1st row of the ASK box.

What happens if you had mistakenly put in a higher price?

As I’ve shown you in my post ‘How to Buy Stocks’, your order would still be executed at the lowest price being offered.

How about if you put in a lower price than the lowest ASK price?

In that case, your order will not be immediately executed. It will then be considered a Day Order. You will be bidding against other buyers and you will have to wait within the day for a trader to accept your Bid price before your order gets executed. If no trader offers the stock at your Bid price within the day, your Order will be automatically cancelled.

We, Truly Rich Club members, are lucky because we use the very same strategy that Warren Buffet uses: SAM.

So, when we get a ‘Stock Alert’ from Bro. Bo suggesting we sell a particular stock, I get super excited coz then I’d see how much profit I’ve made from my shares. With Jollibee, I made over 1k when I sold them (I only had 40 shares. Imagine if I had more?)

Sell at the BID

Since, we are selling, we will be looking at the prices (BID) that people are willing to pay for our stocks. We’re still using ALI as our example.

The 1st row shows: 12 – 2,100 – 27.20

This means that there are 12 people wanting to buy 2,100 (in total) shares of ALI at 27.20.

Same goes for the 2nd row: 6 – 700 – 27.15

6 people wanting to buy a total of 700 ALI shares for 27.15.

And so on and so forth.

That’s it for now. I hope y’all learned something from this post. If yes, then please feel free to tweet, like and share!

14 Thoughts on “Buy at the ASK, Sell at the BID”

1.) Truly Rich Club is for long term investments like 15 to 20 years from now. What happen if some one will buy stocks within 2 years and he has already 20 million in the stock market then stop buying? Is it possible that he will gain after 20 years or lose?

2.) What is the different between buying stocks every month for 2, 000 pesos for 20 years and buying stocks within 2 years for 20 million then stops? Does this makes any difference?

1. Let’s not confuse TrulyRichClub (TRC) with stock investment. TRC is a membership club and as such there is a monthly membership fee for which you will be entitled to receive the 11 Blessings promised when you signed up initially. The fee is a pittance compared to the vast resources (powertalks in videos and mp3s, bulletins, eBooks, Stock Updates, stock alerts, etc) you will have access to once you become a member. The Club is also your guide in stock investing.

For stock investment, on the other hand, you need to have a stock account. Our recommended broker is COL Financial Group. We follow our own unique strategy called SAM and in this strategy, it can be for medium or long term investment, depending on when we hit our target prices. If a person invests 20M in 2 years time and just leaves the investment there to grow for another 15-20 years, there is a great possibility that it will grow big time IF the stocks/companies he invested in are great, stable companies. If yes, then we’re taking advantage of the power of compounding.

2. The difference is the power of compounding. If you have a lumpsum now to invest and you just leave it for 15 or 20 years to grow, then you are most likely to have higher returns than the one who consistently invests a small amount over a period of time.

1. We earn when we buy stocks at a low price, and when the stocks appreciate in value or when it hits our Target Price, we sell. That is called Trading – the act of buying and selling. So, to answer your question, Yes. We need to trade to earn.

2. There is a possibility that you won’t earn if the stock price will remain stagnant for the next 5 years, or worse, lose your investments if your stocks decrease in value. And that’s why it is important to have a guide when you venture in stocks. You need to have adequate knowledge and guidance so that you don’t lose in this risky game. That is why it is important to have TrulyRichClub on your side guiding you on which stocks to buy, when to buy, sell or hold, and explaining the WHYs. Plus, here at TRC, you have a whole bunch of people eager to learn and share their knowledge with one another through Q&A in our exclusive TRC social site.

3. You don’t have to actively trade. If you have a lumpsum to invest now, and you just want to leave it to grow overtime, that’s also fine. But remember, TRC caters to all kinds of people including those who are already rich and those who are still on their way to becoming truly rich. And to the latter, we tell them to invest slowly whatever extra amount they have, over a period of time, so that their investments will grow to meet whatever financial goals they may have in the future. So, for them, we advise to trade (buy and sell) monthly, religiously following our unique strategy, the SAM.

The causes of losses, then, may be greed (if you actively trade coz you want to get rich quick), ignorance (lack of proper guidance and knowledge) or pride (when you think you already know it all and you cancel your TRC subscription). But non-trading per se wouldn’t necessarily result to a loss, if at the first instance, you have already invested enough on companies that have great fundamentals.

4. I think what you mean is buy every month, and not sell (trade is your term) often. Again, the answer would depend on what type of companies are you buying? If they are all blue chips, then most likely you will earn and not lose.

Investing in stocks is actually very risky. But as the saying goes, “the higher the risk, the higher the yields/returns”. If your risk tolerance is low, might as well go with guaranteed investments like bonds or time deposits.

2. For as long as the broker is registered with PSE, then we know it’s legit. No need to worry abt it too much. There are numerous brokers you can deal with which can provide you with stock certificates and all, but with online brokerage firms, they try to minimize your costs by making every transaction as do-it-yourself. You trade on your own and print your own records/history.

3. COL is one of the few online brokerage firms registered with PSE. I believe it is a stable company. Plus its owner, Edward Lee, is a good friend and mentor of bro Bo. But you are welcome to research and compare all online brokerage firms. I mean, not all TRC members are trading with COL.

We don’t automatically sell once we reach the TP. We wait for the SELL ALERT email of bro Bo. There are times when the TPs are adjusted coz the market analysts still foresee that the stocks will rise further.